Conditions for Private Bond Purchasers from January 1, 2021

As of January 1, 2021, conditions for purchasers of private placement bonds - Illustrative image.

Article 128 of the Law on Enterprises 2020 stipulates that joint-stock companies that are not public companies may offer bonds privately according to the regulations of this Law and other relevant legal provisions. Specifically:

- The private placement of bonds by public companies, other organizations, and the public offering of bonds are subject to securities laws.- The private placement of bonds by joint-stock companies that are not public companies involves offering bonds not through mass media to fewer than 100 investors, excluding professional securities investors, and meeting specific conditions for purchasers of private placement bonds:

- Strategic investors for private placement convertible bonds and bonds with attached warrants;- Professional securities investors for private placement convertible bonds, bonds with attached warrants, and other types of private placement bonds.

Note Article 128(3) of the Law on Enterprises 2020 stipulates that joint-stock companies that are not public companies offering bonds privately must meet the following conditions:

- The company has fully paid principal and interest of previously issued bonds that have come due or has made full payment of due debts for three consecutive years before the bond offering (if applicable), except when bonds are offered to financial institution creditors of choice;- The company has audited financial statements for the year immediately preceding the year of issuance;- Ensuring compliance with financial safety ratios and safety ratios in operations as prescribed by law;- Other conditions as prescribed by relevant law.

For more details, visit Law on Enterprises 2020, effective from January 1, 2021.

Le Vy

>> CLICK HERE TO READ THIS ARTICLE IN VIETNAMESE